Diary to log my planning/quotes for Protection Insurance for our family

lisyloo

but I suppose it is a different type of life insurance

Yes. Whole of life insurance will eventually pay out (if you keep up the payments) because it's 100% certain you will die at some point.
I suspect you have term insurance which stops at a certain age. If this is around retirement then there is about an 80% chance you won't get any payout because there is only a 20% chance you'll die before the policy finishes.

mae

lisyloo wrote: »

Yes. Whole of life insurance will eventually pay out (if you keep up the payments) because it's 100% certain you will die at some point.
I suspect you have term insurance which stops at a certain age. If this is around retirement then there is about an 80% chance you won't get any payout because there is only a 20% chance you'll die before the policy finishes.

That's right and when you put it like that then the Whole of Life is more tempting but realistically going from £15 per mth for 2 of us 100K jumping to nearly £100 per mth would be too much for us to pay for life insurance when we want to buy IP and even maybe some CI.

I'm learning a lot about all the different types of policies though and I have to stick with it until I get enough info for an informed choice but its obvious that even then there is an element of risk as unless you have a massive pot of money to insure every eventuality you are never going to fully cover or make the perfect choice as we don't have knowledge of the future.

ACG

I do mean this in the best possible way and im only going off your own words (complete novice), its great that you are looking into it, its also fantastic that you are researching everything - you will know what your buying and you can see the benefits of what you are looking into.... BUT, your talking about your family protection, do you not think you would be best speaking to an advisor?

Payment protection is something that will pay your mortgage (and allows you to include a little extra around 10-25%) to cover bills. income Protection would cover a percentage of your wage.

In the main there are a few main types of protection:
Life Insurance...a cheaper alternative can be family income benefit.
Critical Illness insurance.
These 2 can be bought in 1 combined policy to reduce the cost, the downside is that it will only pay out for 1 or the other.
Income Protection.
Unemployment cover.

Not all of these are needed by everyone and its unlikely everyone could afford all of these, its a case of deciding what you do need then which are the most important - whether that be taking out the full amount you need on just 1 or 2 OR taking out a percentage of what you need on all of them.

Also, those premiums are "standard rates" which basically means they are based on you and your family history having no blemishes. If you have had any medical conditions they may have an effect on the premium or the cover.

I know you buy income protection for it to pay out if your ill, but there are insurers that include extra benefits in the price which in itself can be worth paying an extra £1 a month. You are best looking at the different companies and seeing whats included - things like physio cover can be included, access to speak to nurses, hospitalisation cover etc etc. So its worth looking into the different companies in more detail too.

mae

ACG I know what you mean about seeing an Advisor and I would love to do that so I felt I had an experienced person working on my behalf BUT the reason I am trying to do it myself is because if I had an Advisor round he/she would be asking me loads of questions about the cover I want (not really sure without the research) and telling me loads of information that I would probably go over my head (without researching it myself) and then I would avoid it again.

I know the Advisor would be able to advise me but I need time to digest the info and then I feel I am messing the advisor around also there is a fear in me that the advisor might be biased to a company that pays them the most commission...how judgemental of me!

I did go to an advisor once (10 years ago) who advised us re our mortgage and he advised we take out an Endowment Mortgage so we did and I am not sure it was the best advice in the end..I have wondered since if he got more commission by selling us an Endowment? I could be totally wrong and again a novice so I apologise if i have caused any offence to any advisors because I know there are good and bad in every industry but the problem I have is that I don't have a good advisor recommended.

So this is why I thought I would start this diary and log my research/quotes so far and hope that people on here will comment too to help our decisions.

Thanks

mae

ACG also thank you for your post and clarification. Just to clarify neither of us have had any health issues so far, I've had very minor things ie Anaemia..OH has never had a day off sick in his working life he's very fortunate but I know that doesn't stop us being at risk hence my need to sort all this protection out.

ACG

Endowments were before my time so i cant help on that side.

But an advisor wont ask in too much detail about what you want, they might be basic questions but an advisors job is to ask about your situation - then come back and tell you what they think you should have and explain what each policy does.... they have to tell you what it does so you know when you can claim

I wont lie, some advisors will basically sell you whatever they make the most money on - some people are heartless and god knows how they sleep at night.

But there are decent people out there, i used to be an account manager at a life insurance company and found that there are some really good advisors around. You can pay some by a fee instead of them taking commission - atleast then you know your getting unbiased advice. A good test is to see if they just recommend life and critical illness insurance - the good ones i have found will sell income protection - there is less commission and they think its harder to sell...but for the majority of people it should be the first policy they think about.

dunstonh

ACG I know what you mean about seeing an Advisor and I would love to do that so I felt I had an experienced person working on my behalf BUT the reason I am trying to do it myself is because if I had an Advisor round he/she would be asking me loads of questions about the cover I want (not really sure without the research) and telling me loads of information that I would probably go over my head (without researching it myself) and then I would avoid it again.

FAs (tied agents might). However, an IFA shouldnt. An IFA is there to tell you what you need. Then you tell them what you are budgeting and they will adjust it to suit your budget based on your priorities.

Pru's product, for example, is likely to be cheaper via an IFA than their own sales rep. You would also get access to products that you cannot get if you DIY or go direct to provider.

mae

ACG wrote: »

Endowments were before my time so i cant help on that side.

But an advisor wont ask in too much detail about what you want, they might be basic questions but an advisors job is to ask about your situation - then come back and tell you what they think you should have and explain what each policy does.... they have to tell you what it does so you know when you can claim

I wont lie, some advisors will basically sell you whatever they make the most money on - some people are heartless and god knows how they sleep at night.

But there are decent people out there, i used to be an account manager at a life insurance company and found that there are some really good advisors around. You can pay some by a fee instead of them taking commission - atleast then you know your getting unbiased advice. A good test is to see if they just recommend life and critical illness insurance - the good ones i have found will sell income protection - there is less commission and they think its harder to sell...but for the majority of people it should be the first policy they think about.

Thanks ACG..I will give it some thought but I am still scared of booking the wrong IFA and being no way arrogant I still wonder if I am better doing my own research and even if at the end of that I can still decide to try and find a good IFA and I will feel more in control if that makes sense.

mae

dunstonh wrote: »

FAs (tied agents might). However, an IFA shouldnt. An IFA is there to tell you what you need. Then you tell them what you are budgeting and they will adjust it to suit your budget based on your priorities.

Pru's product, for example, is likely to be cheaper via an IFA than their own sales rep. You would also get access to products that you cannot get if you DIY or go direct to provider.

Wouldn't it be the case that the IFA's would get more commission for selling some products than others so could be biased though? Especially when dealing with someone as niave in this area as me at the moment?

As for Pru, although the lady was really nice and helpful and knowledgeable on the phone it was obvious she was hard selling and she is already talking when she will chase me up etc

dunstonh

Wouldn't it be the case that the IFA's would get more commission for selling some products than others so could be biased though?

Theoretically possible but you rarely see it. You can ask to view the research. Cheapest isnt always best. The budget plans will be cheaper than the standard or comprehensive ones. So, dont expect an IFA to pick the cheapest. It is a case of matching your needs and budget.

You could always go fee basis instead. Commission can be agreed to the level of fee if you dont want to pay by cheque. That way the IFA earns the same irrespective if the policy you proceed with.

As for Pru, although the lady was really nice and helpful and knowledgeable on the phone it was obvious she was hard selling and she is already talking when she will chase me up etc

That is normal for sales reps. That is their job.